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In contrast to recent CFO appointments, I am not impressed with China Education Alliance's (CEUA.OB) choice of Ms. Susan Liu. Sure, she was the CFO of Hendrx Corp [HDRX.OB] and Entech Environmental Technology, aka SkyPeople Fruit Juice [SPFJ.OB], both OTCBB companies, but interesting facts emerge just after a little digging.

First of all, HDRX's market capitalization is a mere $2 million, not surprising for a company whose shares are trading at just $0.05 per piece. In fact, HDRX appears to be headed for insolvency. In the company's most recent 10Q, net loss expanded, and the company owes its insiders (including its CEO) almost $1 million. It also has $3.2 million worth of outstanding short-term loans. Further, HDRX is being sued by Worldwide Water for fraud and patent infringement.

SPFJ is even more miniscule, coming in with a market cap of just above $1 million. The stock is highly illiquid and the greatest trading volume since the beginning of May 2008 was a transaction for 900 shares (worth approx. $3,000) on May 27th. It has hardly traded since. What is more interesting is this. The CFO on record is not Susan Liu, but a SPRING LIU. Is this Susan Liu's evil twin? Did she change her name? Is the name Spring suddenly out of fashion in China?

But wait, perhaps it is Spring Liu's predecessor at SPFJ who is the person in question. Well, the last name is LIU as well, but her name is SONG LIU. So, we have three CFOs named Susan Liu, Spring Liu and Song Liu. Who is who? Further digging reveals that Song Liu is indeed Susan Liu, the very same person who was the CFO of HDRX. Mystery solved. But one last intriguing note: Susan Liu's tenure at SPFJ lasted from 3/18/2008 to 4/14/2008, i.e. a period of less than one month!

So why would CEUA appoint someone like Susan (aka Song) Liu to be CFO? Would it be a stretch to say that this is not in the company's interest, given the candidate's background? Perhaps we should ask Crocker Coulson, who is the IR firm for both CEUA and SPFJ.

My Position: None.

Source: China Education Alliance Makes Dubious Hiring Decision